Monday, September 1, 2014

Burgers and BMWs Highlight Rise of North Korea’s Private Economy

By Simon Mundy

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At the fast food bar in Pyongyang’s Munsu Water Park, a hamburger sells for 10,000 North Korean won – nominally equivalent to $76, three to five times a typical worker’s monthly wage.

On an adjacent balcony, Ryang Gwang Jin sits in bathing shorts drinking beer with a friend, overlooking the swimming pool that opened last year as one of the North Korean regime’s most vaunted recent achievements.

Mr Ryang, who says he is an intercity truck driver, paid Won20,000 for his entry ticket – but the 39-year-old seems unperturbed by the apparently extortionate price, as do the many boisterous families playing in the pool below.

On a five-day visit by the Financial Times to one of the world’s most repressive regimes it was impossible to confirm how many of the hundreds of visitors had paid the full admission charge. But the lofty published prices at the Munsu park show the extent to which the rules of North Korea’s private economy have pervaded many areas of life in the country.

Informal markets took off after a severe famine in the 1990s, and have supplanted the state as the main source of livelihood for two-thirds of people, estimates Andrei Lankov, an expert on North Korea at Seoul’s Kookmin University.

Prices in these markets far exceed what would be expected based on official monthly salaries of a few thousand won a month. Now state amenities appear to be following suit. The Munsu entry fee might be a fortune at the official exchange rate of Won132 to the dollar but that figure is meaningless in the country’s black market, where a rate of about Won 8,000 applies.

1 comment:

  1. I was in North Korea two weeks ago. Foreigners are not permitted to use won. However exchange rates for foreign currency is not calculated at the official rate when making a purchase. Therefore a burger does not cost $76. It costs a couple of dollars maximum.